NAMA, October 2009

I oppose the Bill before the House and support the Fine Gael position on NAMA. The proposals are wasteful and represent a reckless use of taxpayers’ money, with €7 billion being paid to banks over and above the value of the assets. That is not a proper use of taxpayers’ money at a time when people are bled dry due to economic circumstances and services are being cut in areas that are sensitive. It is inappropriate when there are alternatives to these proposals.

The Minister is buying unfinished developments and development land that has now reverted to its agricultural value. Huge prices were paid in Dublin for development land. Those of us in rural areas could not believe the prices that were paid for development land in the city. I was a member of the constitutional committee that looked at this some years ago and we proposed that development land would be bought at agricultural values plus 25%. The Government never entertained that idea even though it was strongly supported by the committee. It would have controlled the situation and limited the growth of toxic assets that happened over a period of intense greed.

The situation was manipulated by the people who are now being bought out by the Government. Lands were withheld from the system creating a market that ensured massive profits from development land for developers because of the limited amount of land that would be released to the market. If an alternative approach based on our recommendations, including a consideration of a progressive tax on development land if it was not released for development, had been taken, we would not be in the position we are in now.

The Minister is giving the banks €12,273 for each person in the country. That is what every man, woman and child will allocate from their resources over their lives. A family of four will pay more than €50,000 in future taxation even though taxpayers are not responsible for the actions of some bankers.

There is generalisation that the bankers are at fault but only some bankers are at fault. The bank officials on the desks doing their daily work are not responsible for what has happened. They do a good job and many of them have been destroyed by the actions of a few powerful people in the bank. Their morale and job satisfaction has been destroyed by a powerful elite who became very greedy.

The Government nationalised Anglo Irish Bank, the bank that did most damage. It led the other banks, where the traditional approach had been to avoid these high risk ventures. AIB Bank and Bank of Ireland had a conservative, reasonable approach but because Anglo Irish Bank was seen to be successful they followed suit. That was one of the major problems.

The Minister must now recover massive loans from these developers. They are the friends of the Government, of Fianna Fáil, they are the people who were entertained in the Fianna Fáil tent at the Galway races. The Minister should go after them but he has given them a lifeline in this proposal and that is wrong.

Deputy Mattie McGrath mentioned small businesses. What guarantees have the banks given that if they participate in NAMA they will then lend to small and medium enterprises? This is crucial. This Bill will be passed if the Green Party decides to remain in Government this weekend. This Bill will go through if the Green Party stays in Government over the next weekend. The Government should ensure that money will be allocated to small and medium sized businesses to ensure the retention of employment and the future creation of employment. We would see the green shoots of economic recovery if that were to happen. In bailing out the banks, an agreement must be made that they begin the bail out of the economy and of the people of Ireland.

I question the approach, the actions and the monitoring of the Governor of the Central Bank and the Financial Regulator in this whole saga. They stand accountable to the people and to the Oireachtas to explain why they did not monitor properly the actions of our banks, and why we see ourselves in this position today.

Deputy Bruton drew attention to the former chief economist of the World Bank and a veteran of banking crises all over the world, Professor Stiglitz, who described as “criminal” the Government’s proposed NAMA policy to deliberately overpay the banks by €7 billion for their toxic loans. Professor Stiglitz said that to overpay for these loans is criminal, and he warned that the process will rob the taxpayer. Together with George Soros, the professor is one of the prominent advocates of the Fine Gael good bank solution to fixing banks. He joins financier Dermot Desmond, commentator David McWilliams and Mr. Michael O’Sullivan of Credit Suisse, among others.